This article is written by Peters and Associates.
Question: I’m recently divorced. I got to keep our home, but now I need to remove my ex-husband’s name from my mortgage. Can I do that?
Answer: Because I hear this question every week, I understand this situation very well. I’m afraid you’re not going to like the answer.
In my experience, there is no way to remove a single party from an existing real estate loan. You can refinance the property, via traditional refinancing methods, into one person’s name, but that pays off the original mortgage and sets up a new loan with new terms. It would have to be a traditional refinance (not HARP) and generally cannot happen if you are underwater, have missed any payments in the last year and/or do not qualify to refinance the home on your own merits. For refinance options, you would need to speak with a lender.
This is true regardless of what the divorce decree says, because the divorce can’t alter the original agreement between you, your ex, and the bank. So, if the divorce agreement says you must remove his name, you’ll either need to buy out — in other words, pay off — the current mortgage, refinance it into your own name or sell the property.
If you don’t qualify to refinance on your own, our firm’s recommendation is to sell the property in a traditional sale if there’s equity or via short sale if it’s underwater. I understand this probably runs counter to your emotions, as most people want to keep a home in a divorce. Sadly, when refinancing is not an option, selling the house is the only way to get a “clean break” from the marriage and prepare yourself for a new, brighter future. As I’m sure you’re aware, there can be problems for both of you if he’s not removed.
The biggest problem actually is on your ex’s side. He probably won’t be able to buy another property while his name still is on your home loan. If and when he realizes that, it can quickly become your problem. Your ex-husband could petition the courts to force you to sell the house just to get his name off the loan. There may be other issues for you down the road, too. For example, if you try to sell the home five, 10 or 20 years from now, you still may need his approval and signature to close the deal.
In other words, if you don’t qualify to refinance the home in your name only and you don’t sell the property now, you may be opening yourself up to a huge nightmare in the future because your ex will retain certain rights and responsibilities to the property and loan.
Best of luck, and thanks for your question.
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Please note: The information in this column is intended for general purposes only and is not to be considered legal or professional advice of any kind. You should seek advice that is specific to your problem before taking or refraining from any action and should not rely on the information in this column.